AWB Amplified highlights new tax proposal

The latest edition of AWB Amplified takes a deeper look at a proposal to raise the B&O service tax by 67 percent. AWB Amplified is a video news series that offers fresh insights into the issues that impact Washington employers.

The latest edition of AWB Amplified takes a look at a significant tax increase proposal for service businesses that’s moving quietly through the Legislature.

Senate Bill 5129 would raise the business and occupation (B&O) tax on services by 67 percent – meaning doctors, hair stylists and other employers across the state that provide services to their customers. The current B&O tax rate of 1.5 percent would rise to 2.5 percent.

Medical professionals say the margins to run a medical clinic are tight, and adding a new service tax could actually mean fewer Medicaid patients are served as a result of the tax increase.

Dr. Chelsea Unruh of Yelm Family Medicine speaks out in this edition, as does D’Arcy Harrison, owner of D’Arcy Hair Design in Seattle.

The new tax is a big part of Gov. Jay Inslee’s budget proposal for the 2019-21 state budget cycle and is still under consideration by the Legislature.

Today, state government will have about $50 billion to work with over the next two years, AWB’s Clay Hill explains. The governor’s budget proposal would raise about $3.7 billion in new taxes on top of that.

Notably, most of the new tax collections would come from these service businesses. Roughly 175,000 taxpayers would shell out about $2.6 billion.

“This is simply too much to ask of Washington’s small businesses,” Hill says in the video. “Lawmakers will have $50 billion dollars at their disposal to run the state over the next two years, if they don’t raise taxes. It’s time to live within our means.”

For more information or to get involved, contact Hill at 360.943.1600 or ClayH@awb.org.